Life is full of risks.
Risk is the chance that something will go wrong – from mere inconvenience to catastrophic loss of life and property.
Humans have managed risk pretty well over the millennia. We know that, because we’re still here.
Leaders have led teams who have worked to get us here. Of course, many have failed but more have succeeded so civilization marches on.
The challenge for individual leaders is to lead a group that succeeds.
To take enough risks to move forward but not so much that they fail, and to manage failure when it happens.
For organizations, risk management is a key leadership challenge.
There is no simple formula for managing risk. Only practice.
Great leaders all take chances.
The ones who survive may be lucky, but there’s more to good risk management than luck.
Learning by doing teaches leaders what works and what doesn’t. Great organizations value this thing and even give it a name.
It’s called Experience.
To state the obvious, there’s a direct link between the experience of leaders (and their teams..) and the likelihood that something will go wrong. Also the chance they will recover well when things go wrong.
You want experienced people in your lifeboat when the ship is sinking.
It’s no coincidence that the heaviest leadership responsibility is usually loaded on older shoulders.
The answer to better managing risks isn’t having older leaders though. It’s having more experienced leaders, which isn’t the same thing.
Risks are best reduced over time by exposing young leaders to more responsibility early.
Let them learn early and harvest that experience later.
Organizations need to identify talent young and let them learn by doing. Real leadership roles, not supporting roles with manager in their title and no one in their team.
Not just for diversity but for future experience building.
Give young leaders risks to manage, and risks will be better managed over time.
“..risks are reduced over time by exposing young leaders to more responsibility early.…”
Do you know the biggest risks your team faces?
Have you even thought about them?
Do you have a plan to manage risks?
How much do you rely on Prevention? Better processes, more security, better governance?
How much do you rely on Insurance? Pay the premium, make a claim?
How much do you rely on Experience? Corporate knowledge, battle scars, practice?
If you’re a leader, who are you promoting? Are younger team members kept in cotton wool or thrown into the fray?
Were your best leaders given big responsibility early in their careers? I bet they were.
Is promoting to grow experience part of your leadership style?
Do you have young leaders with big jobs?
If you’re a young team member, do you want a bigger role? Are you allowed to take risks?
How long will you wait to be given the chance?
Is risk a problem?
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“I might be wrong, but at least I’ve thought about it…”